The General Economics Division (GED) of the Planning Ministry has released its March 2026 economic update, highlighting mounting challenges from the energy crisis and persistent inflation, despite some improvement in foreign exchange reserves.
The report warns that the ongoing energy crisis is affecting fiscal balances, external accounts, and investment activities.
Although strong remittance inflows and recent reserve gains have provided temporary relief, elevated global energy prices are likely to increase import bills and widen the trade deficit, it said.
The GED noted that policymakers face difficult trade-offs. Maintaining exchange rate stability could strain reserves, while further depreciation of the taka may intensify inflationary pressures.
Similarly, energy subsidies continue to shield consumers but are adding to fiscal burdens, the report noted.
It recommends prioritising energy efficiency, rationalising pricing with targeted subsidies, and tightening external sector management to contain balance of payments risks.
Headline inflation climbed to 9.13% in February 2026, up from 8.58% in January, driven mainly by food prices. Food inflation rose to 9.30%, surpassing non-food inflation for the first time in recent months.
Rice prices, a major concern earlier, eased to 2.39%. However, rising prices of perishables – particularly vegetables and fish – offset this relief. Vegetables alone accounted for 29.13% of total food inflation.
The GED highlighted a widening gap between inflation and wage growth. While inflation reached 9.13%, wage growth remained subdued at 8.06$, intensifying real income pressures, especially for lower-income households.
Banking indicators showed slight moderation. Total deposits stood at Tk 1,967,907 crore in January, marginally lower than December levels.
Public sector credit remained elevated at Tk 611,258.6 crore, indicating continued reliance on domestic borrowing, while private sector credit growth was modest at 6.03%.
Revenue collection by the National Board of Revenue (NBR) fell significantly short of its February target.
Against a revised target of Tk 42,051 crore, collections reached Tk 30,559 crore – over 27% below the target. Although this marked an 8.15% increase year-on-year, revenue declined by 17.48% compared to January.
Implementation of the Annual Development Programme (ADP) weakened during the July-February period compared to the previous fiscal year, according to the report.
The GED attributed the slowdown to land acquisition delays, procurement inefficiencies, and rising project costs linked to the energy crisis.
A sharp increase in spending in February suggests “back-loaded implementation”, raising concerns about oversight and quality of expenditure.
Foreign exchange reserves rose to USD 35.11 billion in February (USD 30.36 billion under BPM6 standards), supported by strong remittance inflows exceeding USD 3 billion.
However, the GED cautioned that this stability remains fragile amid rising energy import costs.
Export performance weakened, with ready-made garment (RMG) exports falling to USD 2.81 billion in February from USD 3.61 billion in January, reflecting softer global demand and higher domestic production costs.
The exchange rate remained relatively stable at around Tk 122.3 per US dollar due to central bank interventions.
However, the Real Effective Exchange Rate (REER) declined slightly to 124.05, indicating a gradual depreciation in real terms.
While this may improve export competitiveness, the benefits are currently being offset by elevated energy-related production costs, the report noted.